The Serious Fraud Office has launched a formal criminal investigation into accounting practices at Tesco, which led to a £263m profit overstatement at the UK’s biggest retailer.

The inquiry, which was confirmed by the watchdog on Wednesday will supercede an investigation by the Financial Conduct Authority (FCA), the City regulator which has been halted with immediate effect. It is not clear whether it will affect the launch of an inquiry by the accountancy watchdog, the Financial Reporting Council (FRC), which is also being considered.

The question to which I would like an answer is this: while Tesco were cooking the books artificially inflating their profits (allegedly), what were their auditors, PwC (formerly Price Waterhouse Coopers) doing?

They are the bands that form the core of most dusty vinyl collections, the soundtrack to many a lost or fading youth. But this Christmas record labels are pinning many of their hopes on rock’s back catalogue to bring in sales, with forthcoming releases by everyone from the Who and Pink Floyd to Neil Young and Bruce Springsteen.

As music companies begin their push for Christmas – their most profitable period; December accounted for just over a fifth of all records sold in 2013 – it seems ’tis the season for the return of “Dad rock”, with deluxe re-releases of classic Led Zeppelin albums leading the charge. It’s a genre many of whose adherents still purchase albums rather than streaming tracks or playlists.

I suppose I should be grateful that they do not describe it as "Grandad rock". Some of us OAPs are still groovers, man.

Britain will not support any future search and rescue operations to prevent migrants and refugees drowning in the Mediterranean, claiming they simply encourage more people to attempt the dangerous sea crossing, Foreign Office ministers have quietly announced.

Refugee and human rights organisations reacted with anger to the official British refusal to support a sustained European search and rescue operation to prevent further mass migrant drownings, saying it would contribute to more people dying needlessly on Europe’s doorstep.

...

British policy was quietly spelled out in a recent House of Lords written answer by the new Foreign Office minister, Lady Anelay: “We do not support planned search and rescue operations in the Mediterranean,” she said, adding that the government believed there was “an unintended ‘pull factor’, encouraging more migrants to attempt the dangerous sea crossing and thereby leading to more tragic and unnecessary deaths”.

Anelay said: “The government believes the most effective way to prevent refugees and migrants attempting this dangerous crossing is to focus our attention on countries of origin and transit, as well as taking steps to fight the people smugglers who wilfully put lives at risk by packing migrants into unseaworthy boats.”

Currently, the Labour Party has 40 Scottish MPs at Westminster. How many will it have after next May? Fewer, I guess. And this will certainly not help:

Johann Lamont is to stand down as leader of the Scottish Labour party, after describing some of her Westminster colleagues as dinosaurs who do not understand the politics they are facing since the referendum.

At the end of a week in which two former Labour first ministers expressed grave concerns about the future of the party, Lamont accused colleagues of trying to run Scotland “like a branch office of London”.

It is understood that she was unhappy that the general secretary of Scottish Labour, Ian Price, was to be removed from office without her being consulted.

Unless the Labour leadership in Westminster takes a more sympathetic attitude towards the party in Scotland, it is heading for more trouble. It is far from impossible to see the Scottish Labour Party seeking independence from its London HQ.

24 October 2014

Kevin Brennan (Cardiff West) (Lab): A few days before her appointment, the rail Minister wrote to her predecessor about proposals that direct services to London from Bedwyn and Pewsey would cease as a result of electrification proposals that she described as “mad”. Will she tell the House whether she has now received a reply from herself, whether she has had an opportunity to read it and whether she agrees with herself?

Claire Perry: The hon. Gentleman has rightly pointed out that one of my important local campaigning priorities is the maintenance of those vital direct links, but as he will know, as a former Minister, owing to ministerial propriety I can no longer directly comment on or investigate those links. I am delighted to say, however, that electrification and investment on that network is an important priority for this Government.

21 October 2014

Seen from Brussels, Cameron’s first problem is that no one knows what he wants. Writing in the Financial Times last November, he called for a policy shift on freedom of movement within the EU by making it more difficult for the poor, not in the current 28 EU states but in new countries which might join. The right to free movement should be linked to average national wealth levels in the countries joining the EU, he said.

(There are in fact no plans for the foreseeable future for any new member states.)

But it is not even clear that Cameron himself knows what he wants, He is planning an announcement but the details (and the timing) are far from settled. The position is further complicated by the fact that the government's policy on the EU appears increasingly to be driven by short term electoral considerations.

No 10 sources declined to go into detail about the prime minister’s planned speech. But it is understood Cameron will go further than his landmark Bloomberg speech of January 2013, when he announced plans to reform the relationship with the EU and offered a referendum in 2017, but made no mention of immigration.

The prime minister later addressed EU immigration in a Financial Times article in November 2013 but suggested restrictions on current EU citizens would be limited to curbing benefit tourism.

Pro-European Tories are alarmed because they believe the prime minister keeps changing his position under pressure from Ukip and Eurosceptics in their own party. They say he initially resisted holding an in/out EU referendum before backing down in the Bloomberg speech. He then suggested restrictions on immigration would apply only to future EU member states, but is now preparing to say they will apply to current member states.

So what will he say? The Eurosceptics will expect him to put up serious barriers to the free movement of labour - barriers which will be unacceptable to other EU member states with whom Cameron hopes (in theory) to negotiate EU reform. Damned if he does; damned if he doesn't.

20 October 2014

The first act of copulation has been traced back to ancient animals that were endowed with such cumbersome sexual organs they had to mate side by side.

Fossilised features of antiarch fish suggest that early intercourse was not the smoothest of affairs, with males faced with the task of steering their bony L-shaped organs between twin genital plates that adorned the females like tiny cheese graters.

No mention of love or kisses, Nor is it surprising that the practice fell into disuse:

The discovery of such ancient copulation means that sex with internal fertilisation evolved early on in the history of vertebrates but was then lost, with fish reverting back to spawning in water, and then evolved again in a different way.

17 October 2014

BANKERS need bonuses to create incentives to behave well, and the EU’s efforts to stamp them out are harming this goal, the Bank of England’s Andrew Bailey said last night.

Stepping up the prudential reg­ulat­ion authority’s campaign against the bonus cap, Bailey argued that the cap was a “bad policy”.

He told the City of London’s banquet at the Mansion House: “Let me be blunt, the bonus cap is the wrong policy, the debate around it is misguided, and the best thing I can say about allowances is that they are a response to a bad policy.

“I will not win friends in some places for saying this, but it dismays me to see a debate which is at times so divorced from the heart of the matter, which is setting appropriate incentives by putting a meaningful amount of pay at risk.”

Bailey wants bankers to receive bonuses for good performance, but for the payouts to be given out over many years in shares so that bad behaviour can be punished with the removal of shares.

Think about it for a moment: "Bankers need bonuses to create incentives to behave well". So, if they don't get bonuses, they will not behave well? In most other walks of life, if you do not behave well, you will receive your P45.

But bankers and their ilk are somehow different. Their enormous salaries are not sufficient to guarantee good behaviour; they need something extra. On this reasoning, perhaps nurses or teachers or checkout girls should also be given bonuses.

Meanwhile, the suspicion remains that the high heidyins in the banking world collect their bonuses regardless of their performance.

16 October 2014

The abandonment of Tuesday’s Serbia v Albania match after a drone carrying a sectarian flag was flown over the pitch has prompted fears of copycat stunts at football grounds in the UK.

The Football League has written to the Civil Aviation Authority, which regulates unmanned as well as conventional aircraft, asking it for guidance on the usage of drones around football grounds. The Premier League is understood to share the Football League’s concerns and is also in communication with them about the issue.

The former Labour minister Tom Watson, who chairs an all-party parliamentary group on drones, said the incident highlighted the dangers of the unregulated proliferation of the use of unmanned aircraft. He said: “The disruption caused by a lone drone with a cam and flag underscores the need for comprehensive review of drone use and regulation, as the APPG on drones have advocated.” He added: “This is the tip of the iceberg.”

15 October 2014

Aye, well. It may please the Tories' core support, but it is not likely to attract the uncommitted:

David Cameron said he would like to ensure that only the “very wealthy” pay inheritance tax as he voiced support for raising the threshold at which the tax is paid.

The prime minister said he would like to ease pressure on people who do not regard themselves as “in any way the mega-rich” but whose estates are subject to the tax.

George Osborne transformed Tory fortunes at the party’s conference in 2007 – and spooked Gordon Brown into abandoning plans to call an early general election – with a proposal to raise the inheritance tax threshold to £1m. This would have been doubled to £2m for couples.

But the pledge was quietly dropped after the 2010 general election in the coalition negotiations as the policy appeared out of place in times of austerity. This means that inheritance tax of 40% has to be paid on estates worth more than £325,000, or £650,000 for couples.

I rather doubt if many of us will be popping our clogs with £325K in the kitty. And, even then, you only pay 40% on the amount by which your estate exceeds £325K. Besides, the "very wealthy" have lawyers and accountants to enable avoidance of inheritance tax.

Finally, what about the deficit? Can we afford to reduce the tax take?

12 October 2014

Survation pops up with a national survey showing them [UKIP] on 25 per cent, just six points behind both Labour and the Tories. That would give Farage 128 MPs! Ukip are on 16 and 17 per cent in two other polls.

Lord Ashcroft, the Tory peer and pollster, said the key to Ukip fortunes is Rochester, where Reckless is seeking re-election. “I do not think you can discount any possibility if Reckless wins,” he said.

10 October 2014

I cannot recall a conflict so swamped by incoherence as the one in northern Iraq. The awfulness of Isis has given the something-must-be-done-even-if-it’s-stupid lobby an ostensibly crushing moral ascendancy. The right takes comfort in faux belligerence: David Cameron’s party conference speech frothed with “evil people, pure and simple”; it dripped with killed children, raped women, genocides and beheadings. He declared that “some people seem to think we can opt out of this. We can’t. There is no walk-on-by option.”

He then walked on by. He suggested that a bit of bombing would do the trick while conceding that “troops on the frontline” would be “Iraqis, Kurds and Syrians fighting for the safe and democratic future they deserve”. None would be British. The adjectives were apocalyptic, the response cosmetic.

Is this really for the protection of the public? Or is it just to make them feel safer?

Travellers arriving at Heathrow and Gatwick from west Africa are to be screened for symptoms of Ebola, Downing Street announced on Thursday night after a day of confusion over the government’s response to the virus that has claimed more than 3,800 lives.

People travelling from the worst-affected countries – Liberia, Sierra Leone and Guinea – will face a questionnaire about their recent travel history, who they have been in contact with and their onward travel arrangements.

Medical staff will be deployed to check some travellers’ body temperature to ascertain if they have fever, one of the early symptoms of the illness. Rail passengers arriving in Kent and London on the Eurostar from Paris and Brussels will also be screened.

As far as I am aware, there are no direct flights to the UK from Liberia, Sierra Leone or Guinea. And, even if there were, someone may be incubating the disease without displaying any symptoms and would therefore slip through any screening. Furthermore, what about all those potential carriers who access the UK at other airports or by ferry?

09 October 2014

Ashley has parked his tanks on the front lawns at Ibrox where he has launched a bid to have the Rangers chief executive, Graham Wallace, and director Philip Nash removed from the club’s plc board.

This Glaswegian power struggle represents the latest attempt at expanding the Sports Direct owner’s football empire which, apart from encompassing Newcastle, already includes a minority involvement with Oldham Athletic and an almost 9% holding in Rangers.

Ashley made his move to unseat Wallace and Nash only six days after increasing his stake in the financially troubled Glasgow club from around 5%. The sports retail tycoon has now called for an emergency general meeting to vote on his proposals but the current Rangers plc board are proving as resistant to his charms as many Newcastle fans and have declared they will endeavour to block this demand.

While there is believed to be strong support for Ashley in certain quarters within Ibrox – most notably from Sandy Easdale, the chairman of the club’s football board – Wallace has been talking to a consortium led by Dave King, a South Africa-based businessman, over a potential multmillion-pound bailout at the Scottish Championship club.

Yet unless King finally makes his long mooted move, Rangers may ultimately have little option but to rely on Ashley, who first invested in 2012 and is now the second-biggest shareholder. Last month it was revealed that he had gained control of the club’s retail division and, even more significantly, has bought naming rights to Ibrox from the club’s former chief executive Charles Green for £1. Green recently conceded there would be nothing to stop him re-naming the ground The Sports Direct Arena.

Something of a mess. I am unable to discern if there are goodies and baddies in this stramash - I suspect that they are all baddies. Sad that a once great Scottish institution has sunk so low.

There's one problem with Evan Davis's Newsnight that the new Paxo Nice can't do anything about: being an expert, he understands complicated things – like economics. Why, he was once the BBC's neo-Keynesian guru. So put him on interview duty after David Cameron's latest tax pledges and who is he given to talk to? Duncan Weldon, Newsnight's own economics correspondent, who gets out a pair of toy scales and shows Evan how deficit reduction and tax giveaways have to balance. See, they go up and down. And why on earth is this drivelling conversation taking place, when Evan a) knows it all and b) could tell us about it in 15 straight seconds?

03 October 2014

Renowned US investor Warren Buffett has said he made a “huge mistake” by investing in Tesco, as the problems mount at Britain’s largest retailer.

Tesco shares have slumped 45% this year as the supermarket issued four shock profit warnings and last week became embroiled in an accounting scandal, admitting it had overstated its profits by £250m. The retailer has been the worst performer in the FTSE 100 index this year and its shares are at an 11-year low.

While I have rather fewer Tesco shares than Mr Buffett, I know exactly how he feels ...

The government has been accused of a “cosy love-in with big business” after it appointed a former executive of oil giant BP to a new role running the civil service.

John Manzoni was given the £190,000-a-year job as the government’s first ever chief executive of Whitehall, despite criticism of his safety record at BP following the Texas refinery explosion and his last company, Talisman, being fined over 50 alleged health and safety violations connected with fracking.

I have no idea if Mr Manzoni will be any better than the other private sector business types brought in to "improve" civil service management. But he would do well to avoid this sort of meaningless guff:

“I am excited to take up this post at the heart of government at this crucial time,” Manzoni said. “My priority is building on the existing momentum to strengthen the execution muscle of Whitehall and embed a sustainable productivity agenda across government."

02 October 2014

Cameron’s [speech] will be remembered for the sheer number of major fiscal policy announcements it contained. Indeed, old fashioned message discipline ensured that, over the course of Conservative party conference, every speech and policy was built around the theme of economic growth. Reforming welfare? Encouraging work. Apprenticeships? Plugging the skills gap. Pension tax relief? Rewarding those who do the right thing.

With his speech yesterday, the Prime Minister added radical tax cuts into the mix. And make no mistake; increasing the income tax personal allowance to £12,500 is pretty radical, not least because of how expensive it is to the Exchequer. Indeed, for the same annual cost, the chancellor could have abolished inheritance tax or capital gains tax. It is, however, a more elegant way to help the low paid than a dramatic rise in the minimum wage, which could cost jobs in sectors where the productivity gains are simply not there to support it.

Increasing the threshold at which the 40 per cent rate of income tax kicks in to £50,000 is another welcome move, but it comes with a few glaring caveats. First, the policy is an aspiration, contingent on a majority Tory government being elected. In other words, whereas Lib Dem support for raising the personal allowance can probably be taken for granted, there’s no guarantee that they’d support similar relief for the squeezed middle.

Of course, if Miliband had made the same speech, promising unfunded tax cuts, he would have been excoriated for fantasy economics. But then life's like that ...

... as the ruling Communist party celebrates its National Day holiday on Wednesday – the anniversary of Mao Zedong declaring the People’s Republic of China in 1949 – it has made clear that not even birds are free from scrutiny.

The People’s Daily, a famously staid Communist party mouthpiece, tweeted a picture of a proud-looking dove above the caption: “10,000 pigeons go through anal security check for suspicious objects Tue, ready to be released on National Day on Wed”. It did not explain what the “suspicious objects” might include.)

01 October 2014

War has always been an expensive business. Here is an account of the RAF's operation yesterday:

“In the course of an armed reconnaissance mission from RAF Akrotiri, two Tornados were tasked to assist Kurdish troops in north-west Iraq who were under attack from Isil (Isis) terrorists”, the MoD said in a statement.

It said the RAF patrol identified an Isis heavy weapon position that was attacking Kurdish ground forces.

A Paveway IV guided bomb was used to attack the Isis position. The Tornado patrol subsequently identified an Isis armed pick-up truck in the same area and conducted an attack on the vehicle using a Brimstone missile.

According to this website, the cost of a Paveway bomb is £22,000, while that of a Brimstone missile is £100,000. Is it value for money to spend £122,000 in order to destroy a heavy machjne gun and a pick-up truck? And that is before you add in the cost of the flights at £35,000 per Tornado per hour. To put it another way, every time a pair of Tornados fly a sortie of about six hours the taxpayer is spending £420,000 before taking account of any bombs and missiles. A campaign lasting two or three years might become extremely expensive.